The Company leases
certain restaurant facilities and its corporate headquarters under non-cancelable operating leases with terms ranging from 5 to 20 years. The restaurant leases generally require payment of contingent rents based on a percentage of sales and require
payment of various expenses incidental to the use of property. Rent expense on all operating leases amounted to $38.0 million, $31.6 million and $27.4 million for fiscal years 2008, 2007 and 2006, respectively, including contingent rental expense of
$3.9 million, $4.5 million and $4.6 million for fiscal years 2008, 2007 and 2006, respectively. Most leases contain renewal options and may be subject to periodic adjustments for inflation and scheduled escalations.

On May 7, 2008, the Company entered into a new five-year revolving credit facility with a syndicate of banks, featuring a maximum available
borrowing capacity of $150.0 million. The facility matures on May 7, 2013.

The aggregate future minimum annual lease payments
under non-cancelable operating leases and the minimum payments due on the credit facility for the fiscal years succeeding December 28, 2008 are as follows:

Payments Due by Fiscal Year

Total

2009

2010

2011

2012

2013

Thereafter

Operating lease obligations

$

270,611

$

39,458

$

38,956

$

37,399

$

34,048

$

29,227

$

91,523

Long-term debt

74,000









74,000



$

344,611

$

39,458

$

38,956

$

37,399

$

34,048

$

103,227

$

91,523

Contingencies

On March 21, 2007, a class action lawsuit was filed in the San Diego Superior Court against California Pizza Kitchen. The lawsuit was filed by a former restaurant employee who purported to represent approximately
17,000 current and former non-exempt California employees. The lawsuit alleged violations of state wage and hour laws involving meal and rest breaks, and sought an unspecified amount in damages. The amount of potential damages, if any, associated
with the claim did not exceed 10% of the Companys current assets. On March 6, 2008, the Company entered into a tentative settlement of all claims in this action. The settlement will enable the Company to avoid lengthy, burdensome
litigation as well as substantial continuing legal and other administrative expenses. The Company does not admit any liability or wrongdoing in connection with the settlement. On May 2, 2008, a judge granted preliminary approval to the class
action settlement. The administrative process commenced on May 12, 2008 and is expected to last approximately eleven months in total. The settlement received final approval by the court on August 15, 2008 and resulted in the dismissal of
the claims under the lawsuit against the Company. Under the settlement, class members had the opportunity to submit claims pursuant to a court-approved process whereby the Company would pay an aggregate amount not to exceed $3.2 million to settle
claims asserted on behalf of the class. The purported class representative alleged that there were violations of wage and hour laws related to meal and rest breaks. The Company believes that the actual number of violations, if any, were relatively
low in number and this was confirmed by the relatively low number of claims filed. No further claims are being accepted by the administrator. The Company accrued a legal settlement reserve of $2.3 million in fiscal 2007 based on the best estimate of
costs that were expected to be incurred in connection with this case. The Company anticipates that this matter will be finalized by the end of the first quarter of 2009.

We are also subject to certain private lawsuits (including purported class action suits), administrative proceedings and claims that arise in the ordinary course of our business. Such claims typically involve claims

from guests, employees and others related to operational issues common to the food service industry. A number of such claims may exist at any given time. We
could be affected by adverse publicity resulting from such allegations, regardless of whether such allegations are valid or whether we are found to be liable. From time to time, we are also involved in lawsuits with respect to infringements of, or
challenges to, our registered trademarks.

12. Commitments and Contingencies

Commitments

The Company leases
certain restaurant facilities and its corporate headquarters under non-cancelable operating leases with terms ranging from 5 to 20 years. The restaurant leases generally require payment of contingent rents based on a percentage of sales and require
payment of various expenses incidental to the use of property. Rent expense on all operating leases amounted to $38.0 million, $31.6 million and $27.4 million for fiscal years 2008, 2007 and 2006, respectively, including contingent rental expense of
$3.9 million, $4.5 million and $4.6 million for fiscal years 2008, 2007 and 2006, respectively. Most leases contain renewal options and may be subject to periodic adjustments for inflation and scheduled escalations.

On May 7, 2008, the Company entered into a new five-year revolving credit facility with a syndicate of banks, featuring a maximum available
borrowing capacity of $150.0 million. The facility matures on May 7, 2013.

The aggregate future minimum annual lease payments
under non-cancelable operating leases and the minimum payments due on the credit facility for the fiscal years succeeding December 28, 2008 are as follows:

Payments Due by Fiscal Year

Total

2009

2010

2011

2012

2013

Thereafter

Operating lease obligations

$

270,611

$

39,458

$

38,956

$

37,399

$

34,048

$

29,227

$

91,523

Long-term debt

74,000









74,000



$

344,611

$

39,458

$

38,956

$

37,399

$

34,048

$

103,227

$

91,523

Contingencies

On March 21, 2007, a class action lawsuit was filed in the San Diego Superior Court against California Pizza Kitchen. The lawsuit was filed by a former restaurant employee who purported to represent approximately
17,000 current and former non-exempt California employees. The lawsuit alleged violations of state wage and hour laws involving meal and rest breaks, and sought an unspecified amount in damages. The amount of potential damages, if any, associated
with the claim did not exceed 10% of the Companys current assets. On March 6, 2008, the Company entered into a tentative settlement of all claims in this action. The settlement will enable the Company to avoid lengthy, burdensome
litigation as well as substantial continuing legal and other administrative expenses. The Company does not admit any liability or wrongdoing in connection with the settlement. On May 2, 2008, a judge granted preliminary approval to the class
action settlement. The administrative process commenced on May 12, 2008 and is expected to last approximately eleven months in total. The settlement received final approval by the court on August 15, 2008 and resulted in the dismissal of
the claims under the lawsuit against the Company. Under the settlement, class members had the opportunity to submit claims pursuant to a court-approved process whereby the Company would pay an aggregate amount not to exceed $3.2 million to settle
claims asserted on behalf of the class. The purported class representative alleged that there were violations of wage and hour laws related to meal and rest breaks. The Company believes that the actual number of violations, if any, were relatively
low in number and this was confirmed by the relatively low number of claims filed. No further claims are being accepted by the administrator. The Company accrued a legal settlement reserve of $2.3 million in fiscal 2007 based on the best estimate of
costs that were expected to be incurred in connection with this case. The Company anticipates that this matter will be finalized by the end of the first quarter of 2009.

We are also subject to certain private lawsuits (including purported class action suits), administrative proceedings and claims that arise in the ordinary course of our business. Such claims typically involve claims

from guests, employees and others related to operational issues common to the food service industry. A number of such claims may exist at any given time. We
could be affected by adverse publicity resulting from such allegations, regardless of whether such allegations are valid or whether we are found to be liable. From time to time, we are also involved in lawsuits with respect to infringements of, or
challenges to, our registered trademarks.

12. Commitments and Contingencies

STYLE="margin-top:6px;margin-bottom:0px; margin-left:2%">Commitments

The Company leasescertain restaurant facilities and its corporate headquarters under non-cancelable operating leases with terms ranging from 5 to 20 years. The restaurant leases generally require payment of contingent rents based on a percentage of sales and requirepayment of various expenses incidental to the use of property. Rent expense on all operating leases amounted to $38.0 million, $31.6 million and $27.4 million for fiscal years 2008, 2007 and 2006, respectively, including contingent rental expense of$3.9 million, $4.5 million and $4.6 million for fiscal years 2008, 2007 and 2006, respectively. Most leases contain renewal options and may be subject to periodic adjustments for inflation and scheduled escalations.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">On May 7, 2008, the Company entered into a new five-year revolving credit facility with a syndicate of banks, featuring a maximum availableborrowing capacity of $150.0 million. The facility matures on May 7, 2013.

The aggregate future minimum annual lease paymentsunder non-cancelable operating leases and the minimum payments due on the credit facility for the fiscal years succeeding December 28, 2008 are as follows:

Payments Due by Fiscal Year

Total

2009

2010

2011

2012

2013

Thereafter

Operating lease obligations

$

270,611

$

39,458

$

38,956

$

37,399

$

34,048

$

29,227

$

91,523

Long-term debt

74,000









74,000



$

344,611

$

39,458

$

38,956

$

37,399

$

34,048

$

103,227

$

91,523

Contingencies

FACE="Times New Roman" SIZE="2">On March 21, 2007, a class action lawsuit was filed in the San Diego Superior Court against California Pizza Kitchen. The lawsuit was filed by a former restaurant employee who purported to represent approximately17,000 current and former non-exempt California employees. The lawsuit alleged violations of state wage and hour laws involving meal and rest breaks, and sought an unspecified amount in damages. The amount of potential damages, if any, associatedwith the claim did not exceed 10% of the Companys current assets. On March 6, 2008, the Company entered into a tentative settlement of all claims in this action. The settlement will enable the Company to avoid lengthy, burdensomelitigation as well as substantial continuing legal and other administrative expenses. The Company does not admit any liability or wrongdoing in connection with the settlement. On May 2, 2008, a judge granted preliminary approval to the classaction settlement. The administrative process commenced on May 12, 2008 and is expected to last approximately eleven months in total. The settlement received final approval by the court on August 15, 2008 and resulted in the dismissal ofthe claims under the lawsuit against the Company. Under the settlement, class members had the opportunity to submit claims pursuant to a court-approved process whereby the Company would pay an aggregate amount not to exceed $3.2 million to settleclaims asserted on behalf of the class. The purported class representative alleged that there were violations of wage and hour laws related to meal and rest breaks. The Company believes that the actual number of violations, if any, were relativelylow in number and this was confirmed by the relatively low number of claims filed. No further claims are being accepted by the administrator. The Company accrued a legal settlement reserve of $2.3 million in fiscal 2007 based on the best estimate ofcosts that were expected to be incurred in connection with this case. The Company anticipates that this matter will be finalized by the end of the first quarter of 2009.

from guests, employees and others related to operational issues common to the food service industry. A number of such claims may exist at any given time. Wecould be affected by adverse publicity resulting from such allegations, regardless of whether such allegations are valid or whether we are found to be liable. From time to time, we are also involved in lawsuits with respect to infringements of, orchallenges to, our registered trademarks.

12. Commitments and Contingencies

STYLE="margin-top:6px;margin-bottom:0px; margin-left:2%">Commitments

The Company leasescertain restaurant facilities and its corporate headquarters under non-cancelable operating leases with terms ranging from 5 to 20 years. The restaurant leases generally require payment of contingent rents based on a percentage of sales and requirepayment of various expenses incidental to the use of property. Rent expense on all operating leases amounted to $38.0 million, $31.6 million and $27.4 million for fiscal years 2008, 2007 and 2006, respectively, including contingent rental expense of$3.9 million, $4.5 million and $4.6 million for fiscal years 2008, 2007 and 2006, respectively. Most leases contain renewal options and may be subject to periodic adjustments for inflation and scheduled escalations.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">On May 7, 2008, the Company entered into a new five-year revolving credit facility with a syndicate of banks, featuring a maximum availableborrowing capacity of $150.0 million. The facility matures on May 7, 2013.

The aggregate future minimum annual lease paymentsunder non-cancelable operating leases and the minimum payments due on the credit facility for the fiscal years succeeding December 28, 2008 are as follows:

Payments Due by Fiscal Year

Total

2009

2010

2011

2012

2013

Thereafter

Operating lease obligations

$

270,611

$

39,458

$

38,956

$

37,399

$

34,048

$

29,227

$

91,523

Long-term debt

74,000









74,000



$

344,611

$

39,458

$

38,956

$

37,399

$

34,048

$

103,227

$

91,523

Contingencies

FACE="Times New Roman" SIZE="2">On March 21, 2007, a class action lawsuit was filed in the San Diego Superior Court against California Pizza Kitchen. The lawsuit was filed by a former restaurant employee who purported to represent approximately17,000 current and former non-exempt California employees. The lawsuit alleged violations of state wage and hour laws involving meal and rest breaks, and sought an unspecified amount in damages. The amount of potential damages, if any, associatedwith the claim did not exceed 10% of the Companys current assets. On March 6, 2008, the Company entered into a tentative settlement of all claims in this action. The settlement will enable the Company to avoid lengthy, burdensomelitigation as well as substantial continuing legal and other administrative expenses. The Company does not admit any liability or wrongdoing in connection with the settlement. On May 2, 2008, a judge granted preliminary approval to the classaction settlement. The administrative process commenced on May 12, 2008 and is expected to last approximately eleven months in total. The settlement received final approval by the court on August 15, 2008 and resulted in the dismissal ofthe claims under the lawsuit against the Company. Under the settlement, class members had the opportunity to submit claims pursuant to a court-approved process whereby the Company would pay an aggregate amount not to exceed $3.2 million to settleclaims asserted on behalf of the class. The purported class representative alleged that there were violations of wage and hour laws related to meal and rest breaks. The Company believes that the actual number of violations, if any, were relativelylow in number and this was confirmed by the relatively low number of claims filed. No further claims are being accepted by the administrator. The Company accrued a legal settlement reserve of $2.3 million in fiscal 2007 based on the best estimate ofcosts that were expected to be incurred in connection with this case. The Company anticipates that this matter will be finalized by the end of the first quarter of 2009.

from guests, employees and others related to operational issues common to the food service industry. A number of such claims may exist at any given time. Wecould be affected by adverse publicity resulting from such allegations, regardless of whether such allegations are valid or whether we are found to be liable. From time to time, we are also involved in lawsuits with respect to infringements of, orchallenges to, our registered trademarks.

The Company leases
certain restaurant facilities and its corporate headquarters under non-cancelable operating leases with terms ranging from 5 to 20 years. The restaurant leases generally require payment of contingent rents based on a percentage of sales and require
payment of various expenses incidental to the use of property. Rent expense on all operating leases amounted to $31,605, $27,384 and $22,845 for fiscal years 2007, 2006 and 2005, respectively, including contingent rental expense of $4,504, $4,579
and $2,869 for fiscal years 2007, 2006 and 2005, respectively. Most leases contain renewal options and may be subject to periodic adjustments for inflation and scheduled escalations.

The aggregate future minimum annual lease payments under non-cancelable operating leases for the fiscal years succeeding December 30, 2007 are as
follows:

Occasionally, the Company is a defendant in litigation arising in the ordinary course of its business, including claims resulting from slip and fall accidents, employment-related claims and claims from
guests or employees alleging illness, injury or other food quality, health or operational concerns. To date, none of these types of litigation, all of which are covered by insurance, has had a material effect on the Company and, as of the date of
this report, the Company is not a party to any material litigation.

9. Commitments and Contingencies

STYLE="margin-top:6px;margin-bottom:0px; margin-left:2%">Commitments

The Company leasescertain restaurant facilities and its corporate headquarters under non-cancelable operating leases with terms ranging from 5 to 20 years. The restaurant leases generally require payment of contingent rents based on a percentage of sales and requirepayment of various expenses incidental to the use of property. Rent expense on all operating leases amounted to $31,605, $27,384 and $22,845 for fiscal years 2007, 2006 and 2005, respectively, including contingent rental expense of $4,504, $4,579and $2,869 for fiscal years 2007, 2006 and 2005, respectively. Most leases contain renewal options and may be subject to periodic adjustments for inflation and scheduled escalations.

FACE="Times New Roman" SIZE="2">Occasionally, the Company is a defendant in litigation arising in the ordinary course of its business, including claims resulting from slip and fall accidents, employment-related claims and claims fromguests or employees alleging illness, injury or other food quality, health or operational concerns. To date, none of these types of litigation, all of which are covered by insurance, has had a material effect on the Company and, as of the date ofthis report, the Company is not a party to any material litigation.

The Company leases certain restaurant facilities and its corporate
headquarters under non-cancelable operating leases with terms ranging from five to 20 years. The restaurant leases generally require payment of contingent rents based on a percentage of sales and require payment of various expenses incidental to the
use of property. Rent expense on all operating leases amounted to $27,384 for fiscal 2006, $22,845 for fiscal 2005 and $20,273 for fiscal 2004, including contingent rental expense of $4,579, $2,869 and $2,634 for fiscal years 2006, 2005 and 2004,
respectively. Most leases contain renewal options and may be subject to periodic adjustments for inflation and scheduled escalations.

The aggregate future minimum annual lease payments under non-cancelable operating leases for the fiscal years succeeding December 31, 2006 are as
follows:

Fiscal Year Ending:

2007

$

33,035

2008

35,449

2009

34,102

2010

32,404

2011

30,762

Thereafter

121,665

$

287,417

Contingencies

Occasionally, the Company is a defendant in litigation
arising in the ordinary course of its business, including claims resulting from slip and fall accidents, employment-related claims and claims from guests or employees alleging illness, injury or other food quality, health or operational
concerns. To date, none of these types of litigation, all of which are covered by insurance, has had a material effect on the Company and, as of the date of this report, the Company is not a party to any material litigation.

The
Company leases certain restaurant facilities and its corporate headquarters under non-cancelable operating leases with terms ranging from five to 20 years. The restaurant leases generally require payment of contingent rents based on a percentage of
sales and require payment of various expenses incidental to the use of property. Rent expense on all operating leases amounted to $22,845 for fiscal 2005, $20,273 for fiscal 2004 and $18,376 for fiscal 2003, including contingent rental expense of
$2,869, $2,634 and $1,827 for fiscal years 2005, 2004 and 2003, respectively. Most leases contain renewal options and may be subject to periodic adjustments for inflation and scheduled escalations.

The aggregate future minimum annual lease payments under non-cancelable
operating leases for the fiscal years succeeding January 1, 2006 are as follows:

Fiscal Year Ending:

2006

$

27,163

2007

28,716

2008

28,167

2009

26,405

2010

24,652

Thereafter

98,712

$

233,815

Contingencies

Occasionally, the Company is a defendant in litigation
arising in the ordinary course of its business, including claims resulting from slip and fall accidents, employment-related claims and claims from guests or employees alleging illness, injury or other food quality, health or operational
concerns. To date, none of these types of litigation, all of which are covered by insurance, has had a material effect on the Company and, as of the date of this report, the Company is not a party to any material litigation.

On February 10, 2003, one of the Companys former servers filed a class action complaint in
Orange County Superior Court in California. The Company agreed to a settlement that received preliminary approval from the Court on June 29, 2005. The settlement contains a maximum pay-out of $1.3 million to all non-exempt employees who worked
in any of the restaurants located in California between October 1, 2000 and December 1, 2004. Class Notices were sent out to class members on or about July 15, 2005. After class administration, there was a final Fairness Hearing
before the Court on September 16, 2005. The Court issued its Order of Final Approval, the agreed upon sums were paid out, and the case is now considered fully and finally settled.

On November 16, 2005, one of the Companys former accountants filed a class action complaint in Los Angeles
County Superior Court in California. The plaintiff alleges that the Company improperly classified her and other non-Certified Public Accountants as exempt from overtime. Accordingly, the Company accrued $600 in legal settlement reserve based on
an estimate of the maximum costs which the Company expects to be incurred in connection with the case. Revisions to this estimate may be made in the future and will be reported in the periods in which additional information becomes known.

The Company leases certain restaurant facilities and its corporate
headquarters under non-cancelable operating leases with terms ranging from five to 20 years. The restaurant leases generally require payment of contingent rents based on a percentage of sales and require payment of various expenses incidental to the
use of property. Rent expense on all operating leases approximated $20,273 for fiscal 2004, $18,376 for fiscal 2003 and

$15,490 for fiscal 2002, including contingent rental expense of $2,634, $1,827 and $1,348 for the fiscal years 2004, 2003 and 2002, respectively. Most leases
contain renewal options and may be subject to periodic adjustments for inflation and scheduled escalations.

The aggregate future minimum annual lease payments under non-cancelable operating leases for the fiscal years succeeding January 2, 2005 are as follows:

Fiscal Year Ending:

2005

$

24,254

2006

25,987

2007

25,734

2008

24,686

2009

22,365

Thereafter

96,712

$

219,738

Contingencies

Occasionally, the Company is a defendant in litigation
arising in the ordinary course of its business, including claims resulting from slip and fall accidents, employment-related claims and claims from guests or employees alleging illness, injury or other food quality, health or operational
concerns. To date, none of these types of litigation, all of which are covered by insurance, has had a material effect on the Company and, as of the date of this report, the Company is not a party to any material litigation.

On February 10, 2003, one of our former servers filed a class action
complaint against us in Orange County Superior Court in California. Accordingly, the Company has accrued $1.3 million in legal settlement reserve based on an estimate of the maximum costs which they expect to be incurred in connection with this
case. Revisions to this estimate may be made in the future and will be reported in the periods in which additional information becomes known.